Beijing-based early-stage venture capital (VC) firm Lanchi Ventures has closed its fourth flagship dual-currency fund with about $560 million in capital commitments, bringing its assets under management (AUM) to near 20 billion yuan ($2.9 billion).
Previously known as BlueRun Ventures China before its rebranding in September 2023, Lanchi Ventures plans to focus the dry powder on supporting artificial intelligence (AI)- and deeptech-centric startups led by entrepreneurs from China.
Its latest dual-currency fund will see Lanchi Ventures leverage the Chinese yuan pool to primarily back “policy-aligned, cutting-edge tech sectors in China” and invest US dollars in “world-leading tech startups and AI projects led by Chinese entrepreneurs,” the firm announced in a WeChat post on April 13.
The fundraising update comes amid a strong rebound of VC fundraising in China on the back of state capital inflows into domestic tech sectors, including in AI and robotics.
In Q1, VC fundraising in China is estimated to have exceeded the previous quarterly record of 68.9 billion yuan ($10.1 billion) in Q3 2021, data from the Asset Management Association of China show. However, this VC market has become increasingly RMB-denominated, with nearly all the top investors among the 1,200 new RMB VC funds created in Q1 being government entities or state-owned firms, according to consultancy Zero2IPO.
USD interest is returning to China only to back a select few of top-tier VCs with a fund mandate heavily tied to deeptech, particularly generative AI and embodied intelligence. Before Lanchi Ventures, tech-dedicated Monolith Management raised $488 million in November for its second USD fund and maiden RMB fund.
In the same month, Source Code Capital also announced $600 million in commitments for its dual-currency growth funds to focus on AI in China and “going-global mega trends.” In March, SCV, the VC platform grown out of Source Code Capital and led by managing partner Samuel Haung, raised $150 million for its debut USD fund to invest in AI-centric themes.
A list of China-focused VCs, including Luminous Ventures, INCE Capital, and Qiming Venture Partners, is still in the market raising a new USD fund, as many seek to capture a revaluation of Chinese tech assets among global LPs following the rapid evolution of AI in China.
Lanchi Ventures, which originated from Silicon Valley in 1998 and started investing in China in 2005, has invested in over 200 companies across industries including AI, deeptech, consumer tech, healthcare, and biotech in over two decades.
Both existing and new limited partners (LPs) committed to its latest dual-currency fund. Its USD fund investors include sovereign wealth funds, insurance institutions, major financial firms, and family offices from markets like Europe and the US, with new LPs from the Middle East, Southeast Asia, and Japan, said Lanchi Ventures in the WeChat post.
Its new RMB fund, which was oversubscribed in less than one year after it started fundraising, drew commitments from China’s state-level funds, regional government industry funds, top funds-of-funds (FOFs), corporates, and family offices. Most existing RMB LPs doubled down on the latest vehicle, said the firm.
Lanchi Ventures has pivoted to dealmaking around large language models (LLMs) in China since early 2021—about one year before DeepSeek’s breakout success with its R1 reasoning model.
Its AI bets span the three key domains of AI foundation models, AI agents, and embodied intelligence, including a few at the unicorn valuation of over $1 billion: Moonshot AI, Genspark, Galbot, and AgiBot.
With $560 million (about 3.9 billion yuan) in commitments, Fund IV was 29.1% smaller than its predecessor dual-currency fund, for which Lanchi Ventures closed an equivalent of 5.5 billion yuan ($805.2 million) in May 2022.
In November 2019, Lanchi Ventures announced a successful fundraise of 3.5 billion yuan ($512.4 million) in Chinese yuan and US dollars combined in the year.
